Thursday, August 25, 2005

How to Increase Customer Loyalty

AOL has agreed to reform its customer service operation following complaints that led to legal action by Elliot 'the Blitzer' Spitzer, New York's attorney general. In a settlement announced Wednesday, AOL will be obliged to remove obstacles US consumers faced when seeking to switch or cancel their internet service.

Spitzer’s office began an inquiry of AOL's customer service policies in response to around 300 consumer complaints from 2000 onwards. The investigation revealed that the net giant had an elaborate system for rewarding employees who succeeded in keeping subscribers who had called to cancel their internet service. In many instances, such retention was done against subscribers' wishes, or without their consent, it was alleged.

Service reps could earn bonuses of tens of thousands of dollars if they could successfully dissuade or "save" half of the people who called to cancel service. Consumer reps were expected to meet minimum retain or save percentages. This led to instances where workers failed to honour cancellations or otherwise made cancellation unduly difficult for consumers. Many consumers complained that AOL personnel ignored their demands to cancel service and stop billing.

Under an agreement with Spitzer's office, America Online (AOL) will alter the incentives it offers to customer representatives who seek to persuade subscribers to stay with the firm. It agreed to set up an independent monitoring auditing regime. The net service giant also agreed to pay $1.25m to New York State in penalties and costs. Lastly AOL agreed to provide refunds to New York consumers who claim harm based on improper cancellation procedures, with compensation of up to four months worth of service.

"This agreement helps ensure that AOL will strive to keep its customers through quality service, not stealth retention programs," Spitzer said in a statement welcoming the settlement.